Between 1921-1924, the Japanese government placed several orders with Heinkel's company, and helped him skirt the Versailles Treaty, which banned the construction of military aircraft in Germany, by informing the company of facility inspections by allied commissions in advance.[3] Japan was part of the inspection commission.[4] Heinkel hid his aircraft in dunes behind his plant and were never discovered during inspections.[4] Heinkel noted in his memoirs that his company's relationship with Japan in the 1920s led to decades of cooperation.[3]

Heinkel had been a critic of Hitler's regime concerning being forced to fire Jewish designers and staff in 1933, however, he was a member of the Nazi party,[4] awarded the German National Prize for Art and Science in 1938, one of the rarest honors of the German government,[5] and he used forced Jewish labor starting in 1941, in which his company was considered a "model for slave labor."[6]

In 1942 the government "nationalised" the Heinkel works. In practice, this meant that Heinkel was detained until he sold his controlling interest in his factories to Hermann Göring. Heinkel moved to Vienna and started a new design bureau and corporate offices in Vienna's Schwechat suburb, establishing manufacturing facilities in Zwölfaxing and Floridsdorf as the Heinkel-Sud complex for his firm, the original Rostock-"Marienhe" plant (today's Rostock-Schmarl neighborhood) becoming the Heinkel-Nord facility. It was at the Heinkel-Sud offices that Dr. Heinkel worked on the Heinkel He 274 four-engined high-altitude heavy bomber design - as one of the trio of proposals for aircraft designs to succeed his firm's failed Heinkel He 177A heavy bomber — until the war ended.

With Germany forbidden from manufacturing aircraft by the Allies, Heinkel used his company's facilities to build private transportation. In 1953 Heinkel began production of the Touristscooter, followed by the Perle moped in 1954. In 1956 he introduced the Heinkel Kabinebubble car. Bubble car and moped production ceased shortly after the restriction on aircraft manufacture was lifted, but scooter production continued until 1965. In 1959, Heinkel's company was sued by Edmund Bartl for being enriched by slave labor during World War II, however, the German Supreme Court dismissed his claims for filing too late and ordered Bartl to pay court costs and attorney's fees.[7]

Ernst Heinkel died in 1958 in Stuttgart. His autobiography, Stürmisches Leben was published in 1956 and translated into English as He1000 in its British edition and Stormy Life: Memoirs of a Pioneer of the Air Age in its US edition.